Brown, Sarkozy show their worth in global economic crisis

PARIS - The mantra of market forces now seems hollow in the light of the global financial crisis, but it remains credible in at least one respect: when there are losers, there are also gainers.

In the Dow Jones political index, for instance, there can be no doubt the two biggest winners are British Prime Minister Gordon Brown and President Nicolas Sarkozy of France.

In little more than a week, the pair have enacted a Lazarus-like revival. The storm that came out of America, ravaging the banking sector, sweeping through stock markets and imperilling the real economy, has enabled them to intervene as the men of the hour.

Brown gets the credit for a bold but cool-headed strategy to rescue banks by state recapitalisation, including nationalisation if need be. Sarkozy, current president of the European Union, seized Brown's scheme and had it endorsed by all 27 EU states, after which it became the template for President George W. Bush himself.

At the start of October, Brown's stock had been in the basement, at home and abroad. But by the end of last week, Brown had rocketed to the rank of elder statesman, suddenly admired for resolve and European commitment. "Gordon Brown can savour the greatest comeback since John Travolta emerged from soap oblivion to make Pulp Fiction," Britain's rightwing Daily Telegraph said, rather sourly.

"It was he, the wizard of Anglo-Saxon social liberalism, who gave the Europeans lessons on interventionism," said the left-of-centre French daily Le Monde.

Sarkozy's transformation has been just as remarkable. Behaviour that before the crisis was attacked as hyperactive and mercurial is now praised as dynamic and decisive.

Last year, Sarkozy had struggled to get himself invited to Bush's summer home. At the weekend he was at the White House laying down the line for a new Bretton Woods - an overhaul of the world financial system.

"This man is never better than at a time of adversity," said the centrist news weekly Le Point, which has been a fierce critic of Sarkozy. "[He] embodied and mobilised the Old Continent, then devised joint solutions, when the world was on the brink."

Both leaders have capitalised on their success on the foreign stage to reduce their domestic opposition to silence or disarray. And they have pushed through, or quietly dropped, other measures or programmes that were unpopular or controversial.

According to a survey published by Le Figaro, 60 per cent of French people believe Sarkozy has handled the crisis well or very well, and 39 per cent badly or very badly.

But both Brown's and Sarkozy's stock could fall almost as dizzyingly as it has risen if the return of confidence proves to be a lull - and if what seems to be a looming recession turns out to be deep and protracted.

"The present crisis may have hit the bankers, hedge fund managers, derivatives traders, and the rest, but they have not yet hit Joe Average," wrote the Independent's Andy Smith.

"Later, when the credit squeeze translates into higher unemployment and falling living standards, then people will again ask 'why vote Labour, when Labour is not protecting people like us?' If Brown is to have any chance of long-term survival, he had better come up with a good answer quickly."

Sarkozy's, meanwhile, has his own Achilles heel - his exposure to accusations of cronyism.

After talking up financial reform, Sarkozy this week will be under pressure to put words into action. A co-operative savings bank, the Caisse d'Epargne, has lost a massive ¬600 million ($1.2 billion) after traders gambled on complex derivatives.

By the new yardstick of managerial accountability, the bank's bosses should be booted out - only they are reputed to be chums of the President or are senior members of his Union for a Popular Majority (UMP) party.

What Sarkozy does next will help determine whether he keeps his new store of political capital - or, as he did after his election win last year, he starts to toss it away.

CHANGING FORTUNES

Two new polls show how economic crisis is helping British Prime Minister

Independent/ComRes poll* 40 per cent support for the Conservatives.
* 31 per cent backing for Labour, reducing gap to single digits for the first time since March.
* 56 per cent disapprove of Conservative leader David Cameron's economic skills.
* 25 per cent believe Cameron would have handled the crisis better than Gordon Brown.

News of The World/ICM poll* 54 per cent thought Brown was doing well in handling the world's economic crisis.
* 43 per cent trusted Brown and his team compared with 35 per cent for Cameron's Conservatives.
* 13 per cent said they were now more likely to vote Labour.
* 22 per cent now less likely to vote Labour.